QNT [2016] NSWCATGD 74

The hearing

1. At the end of these Reasons for Decision are lists of the parties to the application and the witnesses who attended the hearing. [Appendix removed for publication.]

What did the Tribunal have to consider?

1. The Tribunal may, on the application of an interested person, decide to review the revocation of a reviewable power of attorney, or not to carry out such a review: Powers of Attorney Act, s 36(1). As a consequence of reviewing the revocation of a reviewable power of attorney, the Tribunal may decide whether or not to make an order under s 36 of the Powers of Attorney Act (s 36(2)).
2. If on a review of the revocation of the enduring power of attorney, the Tribunal decides not to make an order under s 36 of the Powers of Attorney Act, it may, if it considers it appropriate in all of the circumstances to do so, decide to treat the application for review as an application for a financial management order under Pt 3A of the Guardianship Act 1987 (NSW).
3. The Tribunal may make a number of orders relating to the revocation of a power of attorney including the following:

• An order declaring that Ms QNT did or did not have mental capacity to revoke a power of attorney
• An order declaring that the power of attorney remains valid (either in whole or in part) if the Tribunal is satisfied: 1. Ms QNT did not have the capacity necessary to revoke it; or 2. the revocation is invalid for any other reason, for example, Ms QNT was induced to make the revocation by dishonesty or undue influence.

1. If on a review of the revocation of the enduring power of attorney, the Tribunal decides not to make an order under s 36 of the Powers of Attorney Act, it may, if it considers it appropriate in all of the circumstances to do so, decide to treat the application for review as an application for a financial management order under Pt 3A of the Guardianship Act.
2. To make an order relating to the revocation of the enduring power of attorney made by Ms QNT on 24 September 2015, the following questions may be considered:

• Should the Tribunal conduct a review of the revocation of the enduring power of attorney?
• Did Ms QNT have the mental capacity necessary to revoke the enduring power of attorney on 24 September 2015?
• Is the revocation of the enduring power of attorney invalid for any other reason (for example, dishonesty or undue influence)?
• If the revocation is invalid, should the Tribunal declare that the enduring power of attorney remains valid?
• Should the Tribunal make any orders in relation to the enduring power of attorney? If no, should the Tribunal consider treating the application as an application for a financial management order?

1. To make an order relating to the revocation of the enduring power of attorney made by Ms QNT on 24 September 2015, the Tribunal had to first decide whether to conduct a review of the revocation of the enduring power of attorney.
2. As will be seen below, on the basis of the documentation before it, the Tribunal decided it was in the best interests of Ms QNT to review the circumstances relating to the revocation on 24 September 2015 by Ms QNT of the enduring power of attorney made on 27 March 2012 appointing Mrs MJM as Ms QNT's power of attorney.

Circumstances of the revocation of the power of attorney

1. Mrs MJM provided considerable written evidence to the Tribunal including statements attached to a Statutory Declaration dated 9 November 2015 as well as oral evidence at the hearing. The parts of Mrs MJM's evidence that are relevant to the matters to be considered by the Tribunal are summarised as follows: 1. Ms QNT asked Mrs MJM to be her power of attorney and guardian in early 2012 and instruments were executed to this effect on 27 March 2012; 2. Ms QNT had a psychotic episode in June/July 2013 during which she engaged in excessive spending while not paying her bills; 3. during this period, Ms QNT was diagnosed as being bi-polar during an admission to a Psychiatric Unit; 4. in August 2013, when Ms QNT continued to be mentally unwell, Mrs MJM began acting under the instrument of Power of Attorney dated 27 March 2012. Mrs MJM arranged for Mr Z to provide a letter dated 21 August 2013 (a copy was provided to the Tribunal) explaining that items were bought during a period of Ms QNT being mentally unwell and requesting if these circumstances could be taken into account when the items were returned; 5. during August 2013, Mrs MJM and Mr XGT discussed Ms QNT's deteriorating mental health and the possibility of using Ms QNT's savings to put some type of accommodation on Mr XGT's land where he and his family were living in a caravan; 6. Ms QNT's savings were used to transport and install a home on the land in 2014: no legal documents were drawn up to reflect Ms QNT's interest in the house; 7. Ms QNT was diagnosed with dementia in September 2014; 8. Ms QNT and Mr GZT moved to live with Mr XGT and his family in regional NSW in December 2014; 9. in July 2015, Mr XGT told Mrs MJM that Ms QNT and Mr GZT's unit in South-eastern Sydney needed to be sold to finance the building of two granny flats attached to the house on his property and that Ms QNT and Mr GZT would being contributing $164,000 each; 10. in August 2015, there were exchanges between Mrs MJM, Mr XGT and Mrs SBT in which Mrs MJM was requested to sell the unit in South-eastern Sydney and asked to give provide the instrument of power of attorney dated 27 March 2013; 11. Mrs MJM received a letter from a law firm on 28 September 2015 stating that Ms QNT had on 24 September 2015 revoked the power of attorney and enduring guardianship instruments dated 27 March 2012; 12. Mrs MJM stated that, in her view, if the South-eastern Sydney unit belonging to Ms QNT and Mr GZT is to be sold then the proceeds should be used in such a way so as to provide for Ms QNT's future care and that the relevant legal documents should be drawn up to reflect this; and 13. Mrs MJM raised her concerns about withdrawals from Ms QNT's account that had been made during 2015.
2. Mr XGT provided evidence to the Tribunal in writing as well as oral evidence by telephone at the hearing on 3 March 2016. Mr XGT's evidence can be summarised as follows: 1. Mr XGT had intended to build a property on his land where his parents could live with him but cancelled the development application process when his parents indicated they wished to move sooner than he had expected. Mr XGT then arranged for a house to be moved onto his property. Mr XGT gave evidence that the house was purchased using Ms QNT's savings and was put in his name but that his mother had a "life interest" in it; 2. Mr XGT stated that contrary to Mrs MJM's evidence, he would not be building two granny flats onto the house but rather spending approximately $160,000 from the proceeds from the sale of his parents' unit in South-eastern Sydney to renovate the house and build two additional bedrooms; 3. Mr XGT stated that Ms QNT contributed 33% towards utilities; and 4. Mr XGT said a legal document would need to be executed at some stage to reflect his mother's interest in his house.
3. Ms QNT gave evidence to the Tribunal by telephone. She told the Tribunal that she may go back to live in South-eastern Sydney. She said she shared her living expenses with Mr GZT and Mr XGT and that cash is made available to her in the event she wishes to do her own shopping.
4. The Tribunal also had before it a file note from Ms Dianne L'Estrange, Solicitor, who took instructions from and prepared the revocation documents executed by Ms QNT. The file note states that she formed the view on 18 September 2015 that Ms QNT had capacity to make her own financial decisions. Ms L'Estrange had also seen a letter to this effect from Dr Z at regional NSW. Ms L'Estrange stated in her file note that: 1. Ms QNT told her that she and Mr GZT came to stay with Mr XGT for a short time in December 2014 but now they wanted to live with them permanently; 2. Ms QNT told her that Mr XGT had relocated a home on to his property and it would be renovated to accommodate them all; 3. Ms QNT said she wants to build a house on her son's land with his agreement or buy a house nearby; 4. Ms QNT said she wants to sell her South-eastern Sydney unit but Mrs MJM, her attorney, would not agree to do so and would not listen to her; 5. Ms QNT said that she now wanted Mr XGT to look after her financial affairs in the event she cannot and that she wanted her daughter in law, Mrs SBT as an alternative; 6. Ms L'Estrange returned to see Ms QNT on 24 September 2015 with new powers of attorney, instruments of enduring guardianship, wills and revocations of the instruments in favour of Mrs MJM dated 27 March 2012; and 7. Ms QNT executed those instruments and Ms L'Estrange stated that "at all times [Ms QNT] was able to provide clear instructions and I confirmed the opinion I had formed on my first meetings [Ms QNT] in conference that she was able to provide instructions about and understand the documents she was signing and their effect".

Medical evidence relating to Ms QNT's cognitive capacity

1. The Tribunal had before it the following medical evidence relating to Ms QNT's capacity:

Evidence provided by Mrs MJM

1. Mrs MJM provided to the Tribunal: 1. a Health Professional Report dated 31 January 2016 from Dr Y. Dr Y stating: 1. he had been Ms QNT's GP since 1987 but had not had her under his care since December 2014; 2. Ms QNT has diagnoses of dementia and bi-polar and has "experienced severe bouts of depression broken by periods of acute psychosis requiring psychiatric admission. She requires on-going psychiatric care"; 3. Ms QNT's disability affects her capacity to make informed decisions including about her financial affairs as "she has no proper understanding of her financial status nor how they need to be handled"; and 4. Ms QNT had an MMSE in 2013 of 21/30. 1. Mrs MJM also provided clinical notes dated 22 July 2015 that stated that Ms QNT had an MMSE of 27/30; 2. Mrs MJM provided Progress Notes from a public hospital from Ms QNT's admission in June 2015 that stated Ms QNT "has dementia and not able to give history - initially gave the impression she was visiting her husband in hospital, other times could not say why she was there"; and 3. Mrs MJM provided a letter from Mr Z dated 16 October 2014 stating that Ms QNT cognitive state was declining (her MMSE had dropped from 28 in August 2014 to 26 in October 2014) and this was an early stage of vascular dementia. The letter also stated "I am pleased [Ms QNT] is likely to be moving permanently with her son [in regional NSW] before Christmas".

Evidence provided by Mr XGT

1. Mr XGT provided to the Tribunal the following documentation from health professionals: 1. a Health Professional Report dated 22 December 2015 from Dr Z stating: 1. he has treated Ms QNT since 8 January 2015 and seen her once a month or every second month; 2. Ms QNT has diagnoses of vascular dementia with slight forgetfulness and bipolar depression; 3. Ms QNT's disability did not affect her capacity to make decisions about her financial affairs and she "benefits from son's supervision; assistance with computer"; and 4. Ms QNT's cognitive ability had been assessed in August 2015 as "mild dementia in the form of forgetfulness". 1. a Health Professional Report Form completed by Mr X, Mental Health Nurse Practitioner, stating he had known Ms QNT since February 2015 but not seen her since July 2015. Mr X stated in the form that he had "no information" as to whether Ms QNT's disability affected her capacity to make decisions about her financial affairs. He said her cognitive ability had been assessed in July as being 27/30. Mr X stated in his report he had withdrawn from providing Ms QNT with care because Mrs MJM, Mr XGT, and Mrs SBT "were presenting me with arguments and requests beyond my clinical role" and this was making his care of Ms QNT difficult.

Should the Tribunal make any orders?

1. Section 36(3A) of the Powers of Attorney Act provides that the Tribunal may make the following orders with respect to the revocation of a power of attorney: 1. an order declaring that the principal did or did not have mental capacity to revoke a power of attorney; or 2. an order declaring that the power of attorney remains valid (either in whole or in part if the Tribunal is satisfied the principal did not have the capacity necessary to revoke it, or the revocation is invalid for any other reason, for example, the principal was induced to make the revocation by dishonesty or undue influence.
2. The Tribunal decided not to make an order under s 36(3A) of that Act. It was not satisfied that on 3 March 2016 it could make a finding as to what Ms QNT's mental capacity was at a point in time five months earlier when she executed the revocation of the power of attorney on 24 September 2015. Furthermore, there was no evidence before the Tribunal to support a finding that the revocation was invalid for another other reason such as dishonesty or undue influence.
3. On the basis of the findings above, the Tribunal decided not to make any orders under s 36 of the Powers of Attorney Act.
4. Section 37 of the Powers of Attorney Act states that the Tribunal, on a review of the revocation of a power of attorney, when it decides not to make an order, may (if it considers it appropriate in all the circumstances to do so) decide to treat the application for the review as an application for a financial management order under Part 3A of the Guardianship Act.
5. Section 4 of the Guardianship Act provides that in exercising its functions under that Act, the Tribunal should observe particular principles including that the welfare and interests of persons such as Ms QNT should be given paramount consideration. The Tribunal was satisfied it was appropriate and in the interests of Ms QNT in all of the circumstances to treat the application for review of the enduring power of attorney as an application for a financial management order.

Financial management order

1. Before it can make a financial management order in relation to Ms QNT, the Tribunal has to be satisfied of the following matters:

• Ms QNT is incapable of managing her affairs;
• there is a need for another person to manage Ms QNT's affairs; and
• it is in the best interests of Ms QNT for a financial management order to be made.

1. If the Tribunal decides to make a financial management order, it also needs to decide who should be appointed as financial manager.

Is Ms QNT incapable of managing her affairs?

1. The evidence before the Tribunal was that the most significant financial transaction Ms QNT is intending to undertake is the sale of the unit in South-eastern Sydney she co-owns with Mr GZT. Ms QNT told the Tribunal she would be able to manage this transaction on her own without any assistance.
2. Mr XGT gave evidence that Ms QNT does want to sell the unit and that she would need assistance to manage that transaction.
3. The Tribunal had the benefit of oral evidence from Mr X and Ms W, Case Manager, Older Persons Mental Health Service, for Ms QNT. Ms W told the Tribunal that while Ms QNT may have the capacity to buy herself a coffee or a dress, she would require assistance to sell property. Mr X agreed with this assessment and said that Ms QNT would lack the insight to perform such a complex transaction.
4. In Re D [2012] NSWSC 1006, White J assessed the history of case law in relation to financial management and noted that initially the issue of capability was approached by referring to hypothetical or abstract notions of the ordinary affairs of man. However, the Court now assesses the person's own capacity to do what they are proposing to do [58]. White J used a "rational appreciation" of assets test to determine a person's capability to manage his or her affairs. He adopts the reasoning of Barrett J in P v R [2003] NSWSC 819, who said that the task of the Court in these circumstances: … is to make a judgment as to the capacity and ability of the person concerned to cope with the ordinary routine affairs of living, particularly so far as they concern the person's property…the requisite judgment is to be made in the light of objective physical facts concerning the relevant person's property, money and other assets and the way the person is able to look after them. If there is a lack of capacity, the reason for it does not matter [26].
5. In PB v BB [2013] NSWSC 1223, Justice Lindsay confirmed that the question focuses attention on the special circumstances of the person. His Honour stated, at [7]: Of central significance is the functionality of management capacity of the person said to be incapable of managing his or her affairs, not: (a) his or her status as a person who may, or may not, lack "mental capacity" or be "mentally ill"; or (b) particular reasons for an incapacity for self-management.
6. The test for determining a person's capability to manage his or her affairs has been described as follows (P v NSW Trustee and Guardian [2015] NSWSC 579, [307]-[308]): Is a person reasonably able to manage his or her own affairs in a reasonably competent fashion, without the intervention of a [financial manager] charged with a duty to protect his or her welfare and interests? … [A] focus for attention is whether the person is able to deal with (making and implementing decisions about) his or her own affairs (person and property, capital and income) in a reasonable, rational and orderly way, with due regard to his or her present and prospective wants and needs, and those of family and friends, without undue risk of neglect, abuse or exploitation.
7. The Tribunal was satisfied on the basis of the evidence before it that Ms QNT is incapable of managing her financial affairs in a reasonable, rational and orderly way and to do so could put her at risk of exploitation.

Is there is a need for another person to manage Ms QNT's affairs and is it in the best interests of Ms QNT for a financial management order to be made

1. Ms QNT wishes to sell the South-eastern Sydney unit she co-owns with Mr GZT. The evidence before the Tribunal that Ms QNT would not be able to do this without assistance was compelling and supports the need for a financial manager.
2. Furthermore, the Tribunal was of the view that an important reason for someone to manage Ms QNT's financial affairs is that her legal interest in the property that she is living in with Mr GZT, Mr XGT and his family has not been formally recognised or protected. The evidence was that Ms QNT used her savings to pay for the transportation and installation of a house onto Mr XGT's property. Mrs MJM gave evidence that this amounted to $74,773. The Tribunal was also told by Mr XGT that $160,000 from the proceeds of the sale of the South-eastern Sydney unit would be used to renovate the house to provide two bedrooms for Ms QNT and Mr GZT.
3. In response to questions from the Tribunal, Mr XGT indicated that he was aware that Ms QNT's contribution to his property would need to be reflected in formal legal documentation. He stated that the property was in his name but that his mother had a "life interest" in it. Mr XGT did not appear to appreciate the importance and urgency of formal legal documentation being in place nor how the lack of it could significantly impact upon Ms QNT's ability to fund her future needs or care options in the event her health deteriorated.
4. The Tribunal is satisfied there is a need for a financial manager to be appointed to manage Ms QNT's affairs and it is in her best interests for a financial management order to be made.

Who should be appointed financial manager?

1. In appointing a financial manager, as in making all other orders under the Guardianship Act, the Tribunal must act with the interests of the person concerned as the paramount consideration and in accordance with the other principles set out in s 4 of the Guardianship Act.
2. Section 25M of the Guardianship Act provides that, if the Tribunal makes a financial management order, it may appoint a suitable person to manage the person's estate or may commit the management of the estate to the NSW Trustee and Guardian.
3. In Holt & Anor v Protective Commissioner (1993) 31 NSWLR 227, the Court said that the dominant consideration in making orders about financial managers was the welfare of the person. The President of the Court of Appeal emphasised the Court's broad discretion in deciding who should be financial manager but also set out possible considerations as to the competing advantages of the then Protective Commissioner and a family member as the manager of an estate. The NSW Trustee and Guardian now exercises the role of the Protective Commissioner.
4. On the side of the then Protective Commissioner was seen to be the manifest independence of the statutory office, the advantages of a dispassionate and neutral approach in situations of family conflict and divided views as to the best interests of the person, expertise and experience in managing estates, an impeccable reputation and the security provided to an estate against loss or damage.
5. The advantages of the appointment of a family member were more economic management of smaller estates (that is, freedom from fees) and a greater familiarity with assets and liabilities in smaller estates, a greater capacity of a person with a disability to interact with the manager so as to exercise a greater influence over the broad directions of the management of the estate, love and affection for and knowledge of the protected person and concern for his or her quality of life, and particular qualities or qualifications enabling family members to act as managers.
6. The Court considered that interrelated property interests in a family situation, where a conflict of interest and duty may be "more apparent than real", should not necessarily present an absolute bar to appointment of a family member who is otherwise appropriate. However, when appointing a family member, a decision maker must be satisfied that the estate, income and capital assets, will be utilised to advance the interests and quality of life of a protected person rather than to eventually increase the assets of the family.
7. In Application by AMAM; Re SAM [2011] NSWSC 503, Hallen As J stated: [34] It would be unwise to attempt any definition of the matters that may legitimately be enquired into to determine whether the applicant is suitable. Each case must depend on its own circumstances. Needless to say, however, the Court must consider, at least, the proposed manager's character, honesty and ability to manage, diligently, the managed person's property in the managed person's best interests.
8. Mrs MJM told the Tribunal she had managed Ms QNT's finances diligently and with integrity. She also said the fact that Ms QNT appointed her as her attorney when she had capacity in 2012 showed the trust Ms QNT had in her.
9. Mr XGT told the Tribunal he was willing to be financial manager for Ms QNT. He said that he would put various options to his mother and discuss them with her. He said that he wanted to care for his parents and for them not to have to go into care.
10. Mr GZT said he had full trust in his son looking after their finances. Ms W also stated that Ms QNT trusted Mr XGT and Mrs SBT in relation to her affairs. Ms QNT did not give any indication to the Tribunal that she did not trust her son to act in her best interests.
11. The Tribunal does not doubt the care and affection that Mr XGT has for his mother. The Tribunal was concerned, however, that Mr XGT has not taken appropriate steps to protect Ms QNT's financial interests to date. Furthermore, Mr XGT's interests are now intermingled with those of Ms QNT in such a way that may make it difficult for him to separate out what is in Ms QNT's interests from what is in his and his family's interests. For example, in the event Ms QNT's legal interest in his family home is formally documented and Ms QNT needs to liquidate her contribution to fund her future needs or a nursing home bond, it is likely that the family home will need to be sold. This may put Mr XGT in the unenviable position of taking action in the interests of his mother (as is required by a financial manager) that impacts significantly on the interests of his family.
12. The Tribunal was satisfied it is in the interests of Ms QNT for an independent financial manager to be appointed for Ms QNT and that the estate of for Ms QNT should be committed to the NSW Trustee and Guardian.

REVIEW OF APPOINTMENT OF ENDURING GUARDIAN

1. Due to time constraints on 3 March 2016, the Tribunal was not able to proceed to consider the review of the appointment of Mr XGT as guardian and Mrs SBT as alternative guardian.
2. The Tribunal was satisfied there was no risk to Ms QNT in adjourning these proceedings and did so to a date to be fixed by the Registrar.

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I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 20 December 2018